The Financial Conduct Authority (‘FCA’) published FG15/4: Social media and customer communications (the ‘Guidance’), which provides guidance on financial promotions in social media and customer communications (available here). The Guidance sets out the FCA’s rules on financial promotions on social media, and provides examples of compliant and non-compliant communications to help organisations conform.
A financial promotion could be any form of communication that includes an inducement or invitation to engage in financial activities. The Guidance stresses the fundamental requirement that all communications must be clear, fair and not misleading, both when first published and also if they are then retweeted or shared on Facebook. Furthermore, non-intended recipients must not be misled or confused by any such communication they receive.
If a communication is shared (e.g., retweeted) then the responsibility to comply with the FCA’s rules falls on the new communicator of the message. This applies unless the new communicator is not sharing the message in the course of business. The sharing of a message does not, however, ‘cure’ any original non-compliance by the original communicator.
Organisations are also required to ensure that any financial promotion addressed to a client is clearly identified as such. The FCA previously suggested that adding ‘#Ad’ met this requirement, but they now advise that hash-tags are not necessary to identify promotional content, as many social media platforms already clearly state whether content is paid-for advertising. The hash-tags provide no additional benefit and also have the potential to confuse customers by creating links to irrelevant pages, so the FCA has removed ‘#Ad’ from their recommendations.
The FCA also confirmed that if an employee on his or her personal social media account, e.g., Twitter or Facebook, promotes content that could be considered an ‘invitation’ or ‘inducement’, this is tantamount to financial promotion. Employees should be aware of this, for example, through a corporate social media policy, to ensure that any promotional communications meet FCA requirements.
Any individual or organisation using social media to promote services or products should make themselves familiar with these new clarifications in the Guidance and take any necessary actions to ensure compliance.